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Effective Motivation

A wake-up call from OSHA last year has many safety managers thinking hard about their incentive programs.

by Bill Sims, Jr.

A little more than a year ago, the Occupational Safety & Health Administration gave every safety director a wake-up call when it fined a company called USA Waste $65,000 for having a safety incentive program. And what a call that was!

OSHA cited USA Waste Management of Ohio under 1904.2(a) of the recordkeeping standard (the OSHA 200 Log reporting requirement). USA Waste Management has a bonus pool that rewards employees with excellent safety records. The pool also includes good attendance and good work practices. The citation suggests Waste Management coerced employees to go against medical authorities in order to falsify records. USA Waste Management is contesting the citation.

Many factors cause under-reporting besides poorly designed incentive programs. These include sloppy recordkeeping, lack of management, and more.

OSHA takes the position that "Traditional Incentive Programs" that link rewards to injury reduction "can provide an inducement for workers to under-report injuries and illnesses." Some members of the National Advisory Committee on Occupational Safety and Health (NACOSH) initiated an investigation by OSHA in 1998 to determine whether incentive programs lead to under or non-reporting of injuries. In October 1998, a firm commissioned by OSHA, Dennison Associates, submitted a draft report entitled "Review of the Literature on Safety Incentives." It was finalized in early 1999.

Twenty-seven incentive programs were formally reviewed, consisting of 16 non-traditional (safe work practices), nine traditional (results focus), and two programs dependent on several measures. This was considered empirical research. The remaining literature reviewed was anecdotal and for the most part described programs that linked employees to financial incentives to reduce the number of reported injuries. This was considered non-empirical data.

The review states, "There is, however, no empirical evidence that such incentive programs (Traditional) have an effect--either positive or negative. We are aware of no empirical studies that evaluate whether incentives exaggerate differences, if any, between reported and actual injury rates."

In earlier articles, we have clearly explained the root causes of injury-hiding and have shown that there are many, many causes of under-reporting besides poorly designed incentive programs. These include sloppy recordkeeping, lack of management, and more. Even OSHA recognizes there are very helpful "non-traditional" incentive programs that are effective, while avoiding the problem of injury-hiding.

But the USA Waste episode has produced a whole new way of looking at safety rewards and recogntion.

The Silver Lining Behind OSHA's Dark Cloud

Many safety managers for the first time are questioning their safety incentive programs. They're asking some healthy questions, such as:

  • Does our incentive program promote injury-hiding?
  • Is our program doing us any good? Is it effective?
  • What behavior changes can we point to and measure as a result of this program?
  • Are we vulnerable to an OSHA fine in the area of injury-hiding?
  • Isn't there some way we can shift to rewarding good behaviors that make safety happen?

The goal: shift to a totally proactive mentality instead of a reactive one. Safety managers are abandoning the age-old practice of rewarding solely for working a period of time without injury, and instead are rewarding for behaviors that make safety part of the process.

There is an enormous fraud factor attached to worker's compensation.

One safety director summed it up this way: "For twenty years we've rewarded departments that worked 90, 180, and 360 days with no lost time. We'd hand out their cash bonuses, but our hearts weren't in it. I know several cases where some of the most unsafe departments got an award, while those that tried harder didn't make it, because of something beyond their control. We need a way to reward safe behavior because that, in the long run, will put our numbers where they need to be."

It was in response to this that we developed a manual-based system some 20 years ago to provide a simple way to reward and recognize employees for following safe procedures, wearing PPE, and other proactive behaviors. This system is a way for a manager to stop, look an employee in the eye, and say, "Thanks, you're doing a great job, putting safety first. Keep it up!"

A new step in that progression is a system allowing a manager to scan an employee's bar code and then scan off all the safe behaviors and unsafe behaviors that employee demonstrates. The unit accumulates the data and provides management reports to show which individuals, teams, and departments are exhibiting safe behavior on a daily basis. Incentive awards are then made based on how proactive you are at safety. This is a new paradigm in safety incentive design. Instead of rewarding a team because those workers simply didn't have an injury, you can measure and reward individuals, teams, and sites based on what they did to make safety happen! Award points are given because you were observed working safely, or because your team has met its improvement goals in key safe behaviors.

But carefully rewarding safe work achievements is still a viable factor. Smart safety managers know there is an enormous fraud factor attached to worker's compensation. In this area, the incentive program is the only effective counterbalance to this abuse. It works where training, behavior-based safety, and all other approaches fail, because the unscrupulous employee thinks twice before ruining an award for other employees.

Emphasizing Proactive Behaviors

One company I spoke with had tried training, behavioral safety, and other techniques with some success--and finally was ready for incentives. I asked the manager whether he felt incentives really were needed.

"Absolutely!" he said. "Last month, we had a lost time injury. The employee was out of work for a week. He claimed that he hurt his knee at work, getting a splinter in it, didn't report it, and that later it had gotten infected and swollen up, resulting in a lost time injury."

Incentives work where all other approaches fail, because the unscrupulous employee thinks twice before ruining an award for other employees.

After investigating the injury, this safety manager discovered:

  • The injury occurred while the employee played basketball on his own time (the splinter was from the wooden basketball court).
  • He decided he'd report it as a worker's comp case because his medical cost was lower.

The worker's compensation system creates an environment where this kind of abuse flourishes. Unfortunately, neither training nor the best behavior-based safety program can eliminate this type of abuse. But incentives can, and do, stop fraudulent abuse of worker's comp. This safety director was convinced an incentive program was the only answer for him.

"Before our incentive program, people ran to the doctor when they got any excuse," said Marie Huber, former Safety Director at Heartland Foods. "After our program, they thought twice about it and would let us treat many injuries in house, which drastically lowered our medical costs."

In conclusion, the trends we see in incentives are these:

  • Continued rewards for periods of safe work, but using proper techniques to eliminate injury-hiding.
  • Greater emphasis on proactive safe behaviors and tying reward programs to this.

Safety incentives are alive and well in the year 2000. We applaud managers who vigorously question the status quo and are not afraid to shake things up as they look for other ways to improve their safety process.

As someone once said, "Sacred Cows make the best hamburgers."

Bill Sims, Jr., is President of Bill Sims Award of Excellence, a company that specializes in developing tax free incentive programs without injury-hiding. The company is located in Irmo, S.C.


Turner Bros. Wins Safety Game with Behavioral Incentives

by Garry M. Ritzky
People Performance Magazine

One of the biggest problems with safety programs is that they are boring to everyone except safety directors, who have an interest based on professional choice. Thus, a big part of the safety director's job is to answer the question: How can the company make safety interesting enough to all employees to improve results?

Safety professionals often find themselves playing the role of the drill sergeant in an organization. Here's why: Safety requires discipline -- doing something the right way, even when a shortcut appears quite harmless. Safety also requires repetition -- reinforcing the same basic concepts over and over again.

Hardly anyone finds fun in discipline and repetition. And most people think accidents happen to someone else, not them. So you need something to break the routine and boredom involved in safety and market the difficult concepts of discipline and repetition. Can safety be made into a game with reducing the seriousness of the subject? If safety were a fun game to play, would it be easier to market internally?

The answers to those questions proved to be "yes" for Turner Bros. Trucking Inc., an oil-field transportation company with fewer than 300 employees. Based in Oklahoma City, the company provides transportation, drilling rig-up and rig-down services, crane rental, drill pipe testing, and storage services to the petroleum and refining industry in Oklahoma, Texas and Colorado.

Since 1992, the company has concentrated on programs that enhance safety using the behavioral theories of Chris Agyris, Frederick Herzberg, Abraham Maslow, Jean Piaget and B.F. Skinner. Several theories of those social scientists were converted into concrete programs:

  • Immediate monetary rewards for safety (Piaget).

  • Self-directed safety teams to increase ownership and investment in company safety and productivity (Herzberg).

  • Behavioral observation of one another by workers, productivity bonuses that include a safety component and measurement of learning from defensive driving courses by third-party road observations (Skinner).

We added one more program -- monthly self-evaluation of management teams, which includes extra compensation for performance.

The company's efforts prove that you don't have to be "touchy-feely" to take behavioral theories seriously. Turner Bros. behavioral safety program runs on hard numbers, specific statistics and tough monthly criteria that measure success and failure. The results are posted monthly on colorful graphs to all to see.

While incident rates, accidents per million miles and workers' compensation experience modifiers have been retained as safety performance measurements, additional short-term benchmarks were implemented to give each team a monthly reading of its safety performance. The new measurements offered the opportunity to create a game to achieve safety goals that would benefit employees and produce loss-control results for the company.

We started by asking: What constitutes a game? What kind of competition, rewards and recognition are best?

Rewards for Good Players

To encourage field employees to monitor safety, the company began giving monthly awards to those work teams. First we determined the average historical losses at each team location, then lowered those by 30 percent to set a new achievable benchmark. Successful achievement of the new goal rewarded each team member with work gloves,jackets, and other prizes, as long as the new threshold remained at an improvement level of 30 percent.

The results:

  1. No team has lost its gloves in four years.

  2. Most of the teams have received coveralls for about half the months.

  3. Safety has become al lot more fun and interesting.

Probably the most significant result is that every glove and coverall represent a concrete, tangible reward for achievement of safety goals.

Skinner might call each glove and coverall a "positive reinforcement." Piaget might call gloves and coveralls concrete, not abstract, communication, and most people involved in Turner Bros. program respond better to concrete concepts than to abstract ideas. Agyris might agree that receiving gloves and coveralls is evidence of movement from dependence to independence.

Herzberg might warn managers that higher wages, or gloves and coveralls, by themselves do not necessarily "make people happy or satisfied." Gloves and coveralls are simple "extrinsic" (external) rewards that illustrate concrete evidence of an "intrinsic" (internal) accomplishment or gain.

While the rewards certainly do not constitute "self-actualization" as Maslow envisions the term. employee satisfaction in achieving the goals on their own could be considered a serious step in that direction. The value is not in the fabric of gloves and coveralls but in the human dynamics that demonstrate, "We were successful -- we did that." Herzberg might even let us speculate that these accomplishments produced a small unit of self-fulfillment, or esteem, which is the substance of his hierarchy of needs theory.

The gloves and coveralls worked so well that the company tried a direct monetary incentive. If losses remain under $300 per month per team, each team member receives a monthly incentive check for a $50 gift.

After 3 consecutive months, the $50 amount is doubled. The program became known as "Don't Fool With My Fifty." Employees have been successful between 50 percent and 70 percent of the total months worked since 1992.

The interesting behavioral factor: All team members receive the award, or no one does. anyone who prevents the entire team for receiving the safety bonus is definitely subject to peer pressure. This probably works better than fear of disciplinary action to encourage safe operations. With these positive and negative motivations in place, the safety professional can hang up the police whistle and take off the drill sergeant's cap.

Employees Observe One Another's Behavior

The most interesting of the behavioral experiments has been with a self-directed safety team assigned to move the drilling rigs. Team members observe one another at work and report their observations at the next morning's meeting. Lists of good and bad behaviors are reported, without names.

A rotating group of employees check good and bad columns on a sheet of 37 identified behaviors over a two-year period, with the help of team members. Equipment operators make the observations during idle moments as they sit in their cranes, forklifts and ginpole trucks. The office manager helps them compile their observations into a monthly report that critiques the strengths and weaknesses of each job.

The observers are fairly objective when it comes to their peers, reporting both good and bad behaviors. They know that next month someone else will be reporting on them. If an observer reports a problem with company equipment, the problem is fixed immediately.

Bottom Line Results

For several years prior to 1992, all lines of insurance premiums and all self-funded losses exceeded 12 percent of gross revenue. As of Dec. 31, 1997, that number 4.03 percent, including the cost of incentives along with insurance premiums and self-funded losses (see chart). The difference between 12 percent and 4.03 percent adds to the bottom line, giving the organization a much better chance of showing profit in a cyclical and normally unstable oil-field environment.

In Texas alone, injury losses were reduced by 99 percent from 1992 through 1997. That produced measurable "satisfaction" in the accounting office and in operations. The company-wide trucking insurance policy was reduced by 75 percent during the same period. that, too, made management very happy.

With the safety program in place, Turner Bros. may have avoided some of the usual labor relations problems precisely because the operators participate -- and participation is power -- in matters that affect their lives. Managers still manage and supervisors still supervise, although we would like to think the management philosophy has moved toward a coaching style.

On the whole, the results of behavior-oriented approaches have paid the company good dividends. The changes have certainly moved safety away from the image of "policing." Employees have put an additional three percent to 11 percent compensation in their pockets each year. The company saves on insurance premiums and pays out less money to adjusters and attorneys.

In short the company has no second thoughts about paying for safety, because it works. In the end, it has made safety a lot more fun.

Safety Cost Analysis for Turner Bros. Trucking

Percentages indicate that increases in safety program and incentive costs result in decreases in insurance premiums and total costs.

Cost Category

--------------- % of Gross Revenue ---------------







Safety Program







Company Paid Losses







Bonus Payroll














Total Costs*







*Includes premiums for all lines of insurance, safety program costs, all self-funded losses and employee incentives.

Consultant Dispels Myths About Service Award Programs

By Bob Nelson
Author of 1001 Ways to Reward Your Employees

Synopsis: Many HR Directors are reengineering their Service Award programs and switching from mundane, passive ceremonies to energized systems that increase retention and reward more meaningful contributions.

The vast majority of recognition programs are obsolete, according to a 10-year national study, the Independent National Study of Recognition Policies and Practices, by Perspectives Resources, Inc. In fact, many of them demotivate rather than motivate employees, because they are based on concepts designed in the '60s and '70s and no longer meet either corporate objectives or employee needs.

"Companies are spending more than $500 million annually on service award programs that don't work," says Edward L. Ford, recognition consultant, "and minor changes will not address the problems. At the same time, with all the downsizing and change taking place in business today, recognition is more important to the morale of employees than ever. It is imperative that companies take a fresh look at what constitutes effective recognition -- including what the needs of the award recipient are."

Here, we dispel some common myths about award programs....

Myth one: Logo emblems of gold and diamonds make the best award.

Fact: Corporate emblems are outdated, and 95.8 percent of employees would rather have practical merchandise items as awards.

Since many employees eventually receive logo awards, such as "years of service" awards, they stop carrying recognition impact. Moreover, since employees no longer feel the same job security as in the past, they no longer have the same corporate identity. As a result, the company logo is less important to them.

In addition a two-year study, which covered 1,500 employees and 200 companies, representing a total of 12.4 million individuals compiled the Employee Needs and Wants Recognition Index (ENRI) which measures the effectiveness of recognition award programs. Results showed that only 4.2 percent of employees would choose logo jewelry over merchandise for awards.

Myth two: Recognition programs incorporate award choices that employees really want.

Fact: According to the ENRI, 70 percent of employees would choose something other than what they are offered.

"A human resource executive from one of the nation's largest banks helped put award choices in perspective by asking, 'How many many pen and pencil sets... can you use?' " says Ford.

The ENRI study identified the 200 most popular service award selections.

The top five include:

  • electronics and entertainment
  • cameras, optics and camcorders
  • watches, clocks and weather instruments
  • crystal, china, silver, and kitchen accessories
  • sports and outdoor equipment

"Consider how many of these items and categories are included in your own program," says Ford. "An effective program needs selections that incorporate several of these categories."

Myth three: A simple change in selection or awards will substantially improve your recognition program.

Fact: To address employees' changing attitudes, more and more companies are reengineering their recognition policies.

Here are some key factors in restructuring award programs:

  • Establish the goals and objectives of employee recognition and obtain management support.
  • Survey a representative sampling of employees as to what they want and need in a recognition program. Make sure every region and its differences are represented.
  • Create a program based on employee feedback and input from program administrators. To help empower employees, make it an employee-defined, not a corporate-defined program.
  • As often as possible, make recognition timely, preferably as close as possible to the reason for which you are recognizing an employee, rather than monthly, quarterly or annually.

Reengineering can actually help companies save money rather than spend more on recognition, while allowing them to provide awards that employees really want. For example, 117 companies that re-engineered their programs during 1994 and 1995 saved an average of 42.9 percent on their programs, and their average award cost per employee per year dropped from $17.66 before reengineering to $9.21 afterwards.

Myth four: Companies should reduce or eliminate years of service awards.

Fact: Companies should not cut programs at random. Instead, they need to make all recognition programs more effective by aligning them with shifting employee attitudes and updating them annually.

Identify which types of awards are most appropriate in your present corporate culture. Employees may like the types or recognition your program offers. Their dissatisfaction may lie in the awards they are offered.

We Look Forward to Working with You on Re-Engineering Your Service Award Program!


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